04-19-2019

SURGING SENTIMENT

The Home Purchase Sentiment Index (HPSI) reached its highest point since June 2018 last month. Fannie Mae’s March HPSI showed a 5.5 point increase over February; 56% of survey respondents said it’s a good time to buy a home and 66% said it’s a good time to sell.

ANOTHER ADJUSTMENT

Interest rates for a 30-year fixed rate mortgage trended upward for a second week according to the Freddie Mac Primary Mortgage Market Survey (PMMS) for the week ending April 11. Freddie analysts still expect a strong summer market, saying, “Despite the recent rise, we expect mortgage rates to remain low…boosting home buyer demand in the next few months.”

MARKET METRICS

February’s Realtors® Confidence Index Survey shows that first-time buyers accounted for 32% of sales – a 3% increase year-over-year. The survey also said that average time on market was 44 days, sellers received an average of 2.2 offers and 23% of home sellers offered incentives such as paying closing costs, warranties and repairs.

TRUE TV?

Three out of five home shoppers under age 55 are considering properties that need renovation. Commenting on Realtor.com’s Spring Home Buyer Survey, Chief Economist Danielle Hale said, “…various home renovation TV shows [make] some home shoppers comfortable tackling home renovation jobs to find a home that balances their needs with their budget.” DIY television appears to be a big influence: Nearly 60% of home shoppers considering fixer-uppers said home renovation television has made them more optimistic about tackling projects. However, major overhauls presented in 30-minute segments don’t necessarily portray the mess, cost and inconvenience accurately.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

04-05-2019

5 IN FEB

New home sales jumped nearly five-percent in February from the previous month according to data from the U.S. Department of Housing and Urban Development and the Census Bureau. February’s 4.9% increase was also up .06% year-over-year. The median sales price for new homes reached $315,300 and the average sales price was $379,600.

TEMPERING TREND

Existing home prices increased 4% year-over-year according to CoreLogic’s latest Home Price Index (HPI). The February HPI showed home price growth trending slower in 2019 than the same time period last year. Idaho had the highest annual home price change with a 10.2% increase, while North Dakota suffered a 1.7% decrease from the previous year.

ANXIOUS INVESTORS

Mortgage interest rates experienced the sharpest one-week drop in over a decade according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending March 28. Freddie analysts cited investor anxiety driven by economic concerns expressed by the Federal Reserve.

DECLINING DOMICILES

Home prices in the swankiest parts of the most expensive cities are declining. Fewer millionaires are being minted each year and wealth creation is slowing. Also, stronger capital controls have made it harder to ferry money out of China. Transaction taxes on foreigners have hurt; increased supply is also to blame. Also, trophy properties are progressively behaving like a global asset class and increasingly rise and fall in unison.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

03-15-2019

HOUSING HEALTH

Serious mortgage delinquency rates declined in every state but North Dakota last year according to CoreLogic’s Loan Performance Insights through December 2018. CoreLogic’s Chief Economist Frank Nothaft said, “Our latest home equity report found that the average homeowner saw a $9,700 increase in their equity during 2018. Rising equity reduces the chances of a foreclosure, helping to push the foreclosure rate down to its lowest level since at least 2000.”

TREND END

After weeks of trending downward, mortgage interest rates showed a slight uptick for the week ending March 7 according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). The PMMS reported U.S. weekly averages for a 30-year fixed rate mortgage retreated to early February levels.

ABUSE ACCUSATIONS

A $52,000 steak and lobster dinner and $2,500 for a speech titled “Motivation by Chocolate” are just two disallowed expenses listed in a report released by federal Special Inspector General Christy Goldsmith Romero. Romero called out housing officials in several states for misusing taxpayer money, saying, “Flying around the country, staying at luxury hotels, attending conferences beachside and at other vacation destinations are not ‘must have’ costs for a local foreclosure prevention program.” President Obama established the $9.6-billion dollar Hardest Hit Fund® in 2010 to provide targeted aid to families in 17 states deeply impacted by the economic and housing market downturn.

DELAYED D-I-Y

More than half of U.S. homeowners describe their homes as “a work in progress” according to Porch.com’s “America’s To-Do List” poll. The survey of 2,000 Americans found the average homeowner has nine repairs to make, and only 10% felt they were current with necessary repairs and maintenance. Painting topped the project list for 55% of respondents, followed by bathroom remodels and flooring.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

03-08-2019
FIRST-TIME FORCE

First-timers are driving the market according to Genworth Mortgage Insurance’s 2019 First-Time Home Buyer Market Report. Genworth Chief Economist and report author Tian Liu summarized his findings this way: “…growth in the first-time homebuyer market has accounted for virtually all of the growth in home sales and accounted for 65 percent of the growth in purchase loan originations. First-time homebuyers accounted for 39% of single-family home sales in 2018, up from 31% in 2014. It also was the highest level of first-time homebuyer[s] since 2000.”

POSITIVE PREDICTION

Freddie Mac is hinting that a robust spring housing market is on the horizon. Rates for the 30-year fixed rate mortgage showed little to no movement in Freddie’s Primary Mortgage Market Survey (PMMS) for the week ending February 28. PMMS analysts also published a 5.3% week-over-week increase in the number of mortgage applications for the same week.

RENT RECISSION

Average rents retreated in the final quarter of 2018 after reaching an all-time high in Q3. Nationwide median rents finished last year with the steepest quarterly decline in 30 years, which is the largest drop since the U.S. Census Bureau began keeping track in 1988. Median rents reached $1,003 before dropping back to $947. Nationwide median rents are still up year-over-year in spite of Q418’s rollback.

FLIPPING OUT?

Home flipping shows aren’t necessarily reality TV according to online home improvement site porch.com. Porch polled 370 people who flipped real estate in the last five years and uncovered some sobering stats for aspiring real estate moguls: 63.5% underestimated the cost of the project, 41.6% used personal funds to facilitate the flip and the average project cost was $100,000. Problems cited by flippers included lack of adequate funding, failure to inspect property and/or research the neighborhood and mistakes with fixtures, surfaces and landscaping.

 

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

02-22-2019
INCREMENTAL INCREASESThe housing market is changing according to Zillow Senior Economist Aaron Terrazas, who says, “The number of homes on the market is hesitantly inching higher–now approaching the highest level in a year and a half. The first quarter of 2019 is shaping up to be more competitive than the lull we saw as 2018 came to a close.” The number of homes for sale has increased in four of the last five months after four years of decreases; however, Terrazas says, “…buyers should not mistake a few more options for a sudden bounty.”
LINGERING LULLMortgage interest rates trended downward to a 12-month low according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending February 14. Freddie Mac cites a “combination of cooling inflation and slower global economic growth” for the latest drop.
RISING RENTSSingle family rent prices are up for the month of December according to CoreLogic’s Single Family Rent Index (SFRI). Rent increases still trailed home price growth during the same period. However, CoreLogic Principal Economist Molly Boesel gives a broader perspective, saying, “The strengthening in rent prices reflects strong economic and labor markets. Single-family rents increased an average of 3 percent in 2018, exceeding the 2.7 percent average pace experienced in 2017.”
PRECIOUS PERSPIRATIONThe Department of Housing and Urban Development (HUD) has awarded $10-million in “sweat equity” grants through its Self-Help Homeownership Opportunity Program. The money will help low-income families and individuals become homeowners through the work of four non-profit organizations. Grant Amount Housing Assistance Council in Washington, D.C. received $1.2-million, WA-based Community Frameworks $1.3-million, Tierra Del Sol Housing in NM $2.1-million, and $5.3-million went to Habitat for Humanity International in GA.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

02-08-2019
DOWN DECEMBERPending home sales dropped 2.2% in December according to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI). The drop is due to several factors according to NAR Chief Economist Lawrence Yun who said, “The stock market correction hurt consumer confidence, record high home prices cut into affordability and mortgage rates were higher in October and November for consumers signing contracts in December.” Yun predicts solid market activity for this year, adding, “The longer-term growth potential is high…the forecast for home transactions has greatly improved.”
RATES RISEThough mortgage interest rates trended slightly upward in Freddie Mac’s Primary Mortgage Market Survey for the week ending January 31, analysts note that the uptick is tempered by slowing home price appreciation and should not be a detriment to the spring home-buying season.
EQUITY ASCENSIONAmericans who sold homes in 2018 reaped the biggest profit in 12 years according to the Year-End 2018 U.S. Home Sales Report from ATTOM Data Solutions. Home sellers realized an average home price gain since purchase of $61,000 – up from $50,000 in 2017 and $39,500 in 2016. Last year’s average equity gains reached their highest level since 2006.
FEB FACTSOnce every six years, February is the only month that has four, full seven-day weeks. February ends on the same day of the week as October every year. In leap years, it’s the only month that begins and ends on the same weekday.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

01-25-2019

DOWN DECEMBER

Existing home sales fell 6.4% between November and December and 10.3% year-over-year according to the latest National Association of Realtors’ (NAR) Confidence Index. NAR Chief Economist Lawrence Yun cited interest rate activity as the cause. “The housing market is obviously very sensitive to mortgage rates,” he said. “Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”

STAYING STABLE

Though mortgage interest rates are nearly 1/2% higher than a year ago, Freddie Mac is reporting that they were unchanged for the week ending January 17. The Primary Mortgage Market Survey credits a manufacturing slowdown and signals that the Federal Reserve may back off the pace of its own rate increases.

FORECLOSURES FLAT

The national delinquency rate dipped to its lowest rate since 2000 last month, according to Black Knight Financial Services (BKFS). December’s 3.9% U.S. mortgage delinquency rate was the lowest year-end number since the turn of the century, and 17.55% below 2017’s closing total.

PRE-APPROVED PEOPLE?

The answer to a whimsical question posed by creative market research agency Atomik Research in the December 2018 Homebuyer Sentiments Survey provides interesting insight into modern dating. Nearly half – 48% – of survey respondents answered “Yes” to this question: “Just like with getting a loan for buying a home, do you wish finding a dating partner also required a pre-approval letter?”

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

01-18-2019

HOARDING HOMES

The housing inventory crunch is largely due to a spike in the amount of time Americans are staying in their homes. Based on a joint analysis of indicators with Moody’s Analytics, First American Chief Economist Mark Fleming said, “…today, we are in a near unprecedented homebody era, as increasing mortgage rates, low supply, low rates of foreclosure and tight credit have increased homeowner tenure to the highest level in 18 years.” The long-term historical tenure for U.S. homeowners is six years.

BORROWING BOOST

A rate decline led to an application incline according to Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending January 10. The PMMS credits lower energy prices and continued income growth for a 20% increase in mortgage applications last week as rates for a 30-year fixed rate mortgage dipped to the lowest levels since March of last year.

REFINANCE REASONING

The number of Americans who tapped home equity reached a 10-year high in November as the number of borrowers who refinanced to get better interest rates or terms dropped to the lowest level since 2005. Cash-out refinances comprised the largest share of loan origination activity since 2008 according to Black Knight Financial Services’ November Mortgage Monitor report.

MATRIMONIAL MONEY

While wages of men and women with at least a HS diploma are similar early in life, they diverge dramatically with age. The gap peaks at about age 50 with men earning about $76,000/year and women earning about $49,000/year. However, at all ages there is no gap between single women, single men and married women. Married men, however, earn much more and are the cause of the entire gap.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

01-11-2019

SELLING SEASON

The December 2018 Fannie Mae Home Purchase Sentiment Index® (HPSI) shows an array of opinions. Fannie Mae Senior Vice President and Chief Economist Doug Duncan said, “Consumer attitudes regarding whether it’s a good time to buy a home worsened significantly in the last month, as well as from a year ago, to a survey low.” The December survey also revealed that the net share of Americans who said it is a good time to sell a home increased, along with those who say they are not concerned about losing their jobs.

RECESSIVE RATES

Rates for a 30-year fixed rate mortgage dropped back again for the week ending January 3, according to Freddie Mac’s Primary Mortgage Market Survey. Rates have trended mostly downward since the middle of November, but they’re still over a half a percent higher year-over-year.

RISKY RELEASE?

A concept called “equity release” is gaining momentum in the financial world, promising homeowners the ability to tap equity without incurring debt. There’s a growing number of companies offering cash in exchange for the ability to share in a home’s appreciation over time, as well as some who offer sale and leaseback options. Dubbed “innovative” by market watchers, these new finance vehicles seek to capitalize on future property value increases by providing homeowners with cash in hand today.

WILD WEALTH

In 2017, the wealthiest 1% of the global population (77 million people) was estimated to hold 50% of world wealth. Due to better data and estimates, it’s now estimated that they only hold 47% of global wealth. To be in this group, your net worth must exceed $870,000. Thirty-one million of these lucky folks live in the US, followed by 7 million in China.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

01-04-2019

SEASONAL SLOWDOWN?

The ramp up to the holiday season marked a slowdown in home sales according to the latest Pending Home Sales Index (PHSI) from the National Association of Realtors (NAR). NAR Chief Economist Lawrence Yun says November’s 7.7% year-over-year decline “…does not yet capture the impact of recent favorable conditions of mortgage rates.”

RATE ROLLBACK

Mortgage interest rates flashed back to early summer in the last week of 2018 according to Freddie Mac’s Primary Mortgage Market Survey for the week ending December 27. Rates for the 30-year fixed rate mortgage continued their downward trend, dipping close to the point where home sales slowed in the traditionally busy buying season.

EXTENDED EXPANSION

U.S. economic growth needs to continue for seven more months in order to set the record for the longest expansion in U.S. history according to CoreLogic Chief Economist Frank Nothaft, who bases his estimation on over 160 years of business cycle data. Nothaft also predicts 2.4% overall economic growth for 2019 and the potential for 3.4% unemployment, which would mark its lowest rate in 50 years.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.